May 29, 2006

There is a growing danger that rich nations will try to end the impasse in the international trade talks by dumping a lot of trade-distorting measures into the so-called green box which was designed for subsidies that do not distort trade. The G20 group of developing nations has cottoned on to this, as the Financial Express reports.

Jacques Berthelot who is connected to the (French) site Solidarite has sent me his comments on the G20 report the gist of which is that the distinction between amber, blue and green boxes is now obsolete and that subsidies should be banned if they support exports but otherwise allowed.

May 16, 2006

Everyone shares part of the blame for the continued failure of the international trade talks which passed yet another "final" deadline on Sunday without any agreement over the crucial issue of reducing agriculture subsidies. But it is difficult to disagree with Rob Portman, U.S. Trade Representative that ultimately France is the stumbling block.

In a rare moment of self-criticism Mr Portman admitted that the US offer was not perfect but insisted that the real problem was French politics. Anyone driving through France (as I did over the weekend) can see the scale of the problem - mile upon mile upon mile of agricultural land, including seemingly unending vinyards, all held together by antiquated subsidies. When the French government tried to introduce a well-meaning measure to reduce youth unemployment a few months ago, people took to the streets. Goodness knows what would happen if they announced the end of agriculture subsidies even though politicians know in their heart of hearts that they are all wrong.

What I find difficult to grasp is whether there is anything the rest of the world could do that would induce France to introduce serious reforms (beyond its time-lagged acceptance of de-coupling subsidy payments from actual production) or is the problem simply too explosive for politicians seeking re-election to tackle. Any thoughts out there?